Vodafone Idea Position ‘Remains Critical’ Says the UK-Based Telco

Ever since the Supreme Court decision on AGR dues made in October 2019, rumours regarding Vodafone exiting the Indian market were making rounds on the web

By February 5th, 2020 AT 6:36 PM
Highlights
  • Vodafone Idea will have to furnish Rs 53,000 crore as AGR dues
  • Vodafone says government intervention is required for Vodafone Idea to survive
  • Government is preparing to rollout floor pricing in the industry

UK-based Vodafone, in its earnings release, said that the position of Vodafone Idea ‘remains critical.’ Ever since the AGR setback, Vodafone Idea has been seeking relief from the Indian government, but there is no proper response. As part of the dues, Vodafone Idea will have to furnish Rs 53,000 crore as license fee, interest, spectrum usage charges and penalty dues to DoT. Not only Vodafone Idea, but even Bharti Airtel is also facing a major crisis due to the AGR setback. However, Airtel is in the process of raising Rs 40,000 crore to clear the dues, whereas Reliance Jio already paid its dues of around Rs 190 crore. The position of Airtel and Jio seem alright for now, but that’s not the case with Vodafone Idea though.

Vodafone Idea Looking for an Instant Relief from Government

Ever since the Supreme Court decision on AGR dues made in October 2019, rumours regarding Vodafone exiting the Indian market were making rounds on the web. Vodafone firmly said that it would not exit the Indian market, but sought immediate relief from the government. Vodafone Group Plc. Still says terms of the outlook of Vodafone Idea in India as critical. The government did not provide any relief to Vodafone Idea as of now, but Trai is in the process of implementing floor pricing.

In its earnings release, Vodafone said, “VIL is actively seeking various forms of relief from the Indian Government to ensure that the rate and level of payments it makes to the Indian Government is sustainable and it can meet its other commitments as they fall due.”

It will be interesting to see how the government provides relief to Vodafone Idea. The telcos are already battling it out in the Supreme Court regarding AGR dues.

Spreading AGR Dues Payment Over Several Years Will Come as a Relief to Vodafone Idea

As you might be aware of already, Vodafone Idea is eagerly waiting for the Supreme Court decision on the modification of the earlier judgement. Airtel, Vodafone Idea and other telcos filed a modification petition in the Supreme Court, and VIL wants the government to provide a favourable decision. If the Supreme Court decides to allow AGR dues clearance over several years, it will be a welcome move for Vodafone Idea.

Vodafone Idea, Bharti Airtel and Tata Teleservices will combinedly have to pay over Rs 1.02 lakh crore to DoT.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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